Americas action pushes CRH profits to €117m

An improved performance from its Americas division and a stronger US dollar boosted pre-tax profits by 23% at Irish building materials giant CRH in the first half of the year.

The cement specialist yesterday reported pre-tax profits of €117m for the six months to the end of June.

This was up from a figure of €95m for the corresponding period last year.

Year-on-year, group sales revenue rose by 5%to just under €8.6bn.

Earnings before interest, tax, depreciation, and amortisation (Ebitda) of €568m was 1% below the €574m figure generated in the first half of 2011, but was still within management’s guidance range as set out in the group’s last trading update in May.

Basic earnings per share for the first six months amounted to 14.4c, up about 35% on the 10.7c first-half figure from last year, while the interim dividend was maintained at 18.5c.

Net debt was reduced, on a constant currency basis, by nearly €400m to €3.9bn.

On a regional basis, good first half progress was evident in CRH’s Americas business, with sales up by 20% on a year-on-year basis to €4bn and Ebitda rising by 26% to €216m.

Conversely, like-for-like sales in Europe fell by 5% to €4.6bn, with earnings declining by 13% to €352m.

“Problems in the eurozone — which have intensified over the past six months — continue to erode consumer and business confidence in the wider eurozone economy,” said CRH chief executive Myles Lee.

“In the Americas, current trends suggest that the benign early weather in the US has resulted in some pull-forward of construction demand, while after good early momentum, the pace of economic growth has tempered over recent months.”

However, he said it would be unfair to paint Europe as an underperforming market for CRH; as the group has little or no exposure to under-pressure economies such as Greece, Italy, Portugal, or Spain and it remained strong in the likes of Germany, Belgium, Poland, Finland, and Switzerland.

He said management was anticipating the full-year Ebitda for 2012 to be similar to last year’s level of €1.66bn.

However, the second half of this year is likely to see a higher like-for-like sales decline for the European business, than the 5% evident in the first six months; while management is anticipating a much slower rate of growth in the Americas.